Oct 31. /57
Yr lr of yesty’s date hs come t. hand
It apprs t me yt in
an agreemt of this natre a minl lease of this kind ye amt of royalty is ye most importt point a point of ye greatst consqnce to the lessor or landlord, but that it can only be a secondary consideratn for the lessee, ^indeed of less consqce to him than ^many other circces attendg the affair wch attend the undertakg of such la extensve operns.
A permant rise of 2s a ton in ye sellg price of ore in Staffdsh., or a permant fall of 2s a ton in the
price cost of conveying the ore thither, wd be as it seems to me, a considern of more importce than ye royalty payable to ye landowner
And such a rise in price may very well occur ^before long. Iron
has may return any day to its former high price, and that wd cause a correspondg rise in the value of ironstone – in wch advantage ye landowner wd not participte, bg held to a fixd royalty As it apprs ^however yt Messrs S & Co that y wish me to make a proposal for the since you wish me to propose some terms for the workg of the ore beds, rather than make
As it apprs yt y wish me to make some defte proposal on ye subjt ^of workg these iron grounds I have endeavd to <illegible deletion>
ye matter on fair grounds arrive at fair conclusns both with regd to landld & tent.
1) ^As to ye extent of ye works It apprs to me that the lessee ought
to guarantee the quy to undertake to raise at least 20,000 tons of ore per ann. Except during for the 1st year wch ^for his convence wd be left free from such stipuln. Defer
(2). The distinctn of the ore found here into 3
ki qualities kinds or species proposed by you in a former letter seems suffly correct, and agrees fully well ^enough with my own observn – with respect to 2 of these kinds ^I thk the Seend royalty of 1/ per ton may be accepted as ^a fair offer – The third kind is much superr & the result of vars enquirs wch I hve made is that it may be worth ^in Staffdsh about 4/ a ton more than the average value of the two inferr kinds.
Dividing this advantge equally betwn landld & tent – 2s to each – the royalty due on this
kind best kind of ore will be 3/ a ton. The Assumg then that the quan of ore are equally abundt found in equal abundce wch seems not far fm ye truth, the calcn will stand thus
|1||ton ore||1st kind||–||at 1 royalty|
|1||do||2d kind||–||at 1|
Total 3 tons – at 5
that is 1 ton – at 1/8
^Therefore the conclusn drawn is that 1s 8d wd be the fair amt of royalty – to the best of my judgmt – But our expenditure of – <
the?> arithmc will at any rate shew you that we have endeavd to make you a fair offer from the data before us
I wd we wish to add the follg item wch I apprehd y. will hve no diffy in agreeg to.
Item – it is agreed
That if Mr T. or or psns bg his lessees shd hereafter erect smeltg frnces near ye Canal, & adjact to ye wharf &c wch Messrs S. propose to construct, they will engage to supply you with
all the as much ore as they may require, on at ye same terms price p. ton as they have contracted to supply th ore to ye G W Iron Cy at Seend
October 31. 1857
Your letter of yesterday’s date has come to hand.
It appears me that in
an agreement of this nature a mineral lease of this kind the amount of royalty is the most important point a point of the greatest conseqence to the lessor or landlord, but that it can only be a secondary consideration for the lessee, indeed of less consequence to him than many other circumstances attending the affair which attend the undertaking of such labour extensive operations.
A permanent rise of two shillings a ton in the selling price of ore in Staffordshire, or a permanent fall of two shillings a ton in the
price cost of conveying the ore thither, would be as it seems to me, a consideration of more importance than the royalty payable to the landowner.
And such a rise in price may very well occur before long. Iron
has may return any day to its former high price, and that would cause a corresponding rise in the value of ironstone – in which advantage the landowner would not participate, being held to a fixed royalty As it appears however that Messrs Sarl & Co that you wish me to make a proposal for the since you wish me to propose some terms for the working of the ore beds, rather than make As it appears that you wish me to make some definite proposal on the subject of working these iron grounds I have endeavoured to <illegible deletion> the matter on fair grounds arrive at fair conclusions both with regard to landlord and tenant.
1) As to the extent of the works, it appears to me that the lessee ought
to guarantee the quantity to undertake to raise at least twenty-thousand tons of ore per annum. Except during for the first year which for his convenience would be left free from such stipulation. Defer
(2). The distinction of the ore found here into three
kinds qualities kinds or species proposed by you in a former letter seems sufficiently correct, and agrees fully well enough with my own observation – with respect to two of these kinds I think the Seend royalty of one shilling per ton may be accepted as a fair offer – The third kind is much superior and the result of various enquiries which I have made is that it may be worth in Staffordshire about four shillings a ton more than the average value of the two inferior kinds.
Dividing this advantage equally between landlord and tenant – two shillings to each – the royalty due on this
kind best kind of ore will be three shillings a ton. The Assuming then that the quantity of ore are equally abundant found in equal abundance which seems not far from the truth, the calculation will stand thus
1 ton ore first kind – at one shilling royalty
1 ton ore second kind – at one shilling royalty
1 ton ore third kind – at three shillings royalty
Total three tons – at five shillings royalty
that is one ton – at one shilling eight pence royalty
Therefore the conclusion drawn is that one shilling eight pence would be the fair amount of royalty – to the best of my judgement – But our expenditure of –
the arithmetic will at any rate shew you that we have endeavoured to make you a fair offer from the data before us.
I would we wish to add the following item which I apprehend you will have no difficulty in agreeing to.
Item – it is agreed That if Mr Talbot or other persons being his lessees should hereafter erect smelting furnaces near the Canal, and adjacent to the wharf etc. which Messrs Sarl <1> propose to construct, they will engage to supply you with all the as much ore as they may require,
on at the same terms price per ton as they have contracted to supply the ore to the Great Western Iron Company at Seend
1. Sarl & Company, London.